What is crowd financing?Or why $100 is more significant than $10,000 today.

Part1/3

Crowd financing 101

$10,000 $1,000

$100

vs.

vs.

Crowd financing theory

Snap Poll!

How many of you reading this now, would be gamefor dropping more than $10,000 in a single online transaction? 1% of you might, but 99% of

you reading this now probably won’t

$100 on the other hand,is a whole different story.

The internet has made it far easier and more efficient to pitch to 100 investors with $100 each, instead of just one with $10,000. And that’s how we’re leveraging on technology to help you invest better.

Businesses have the chance to reach investors (you!) directly, and bypass costly intermediaries.

Investors enjoy complete

transparency, and invest at their

level of comfort. Validation from

the crowd helps refine and

optimise a business proposition,

in preparation for its introduction

to the open market.

With crowd financing, you now

have the opportunity to do

better for the economy, for

businesses around you, and

for yourself.

In the new economy,

this entrepreneur’s

business could

potentially be the

best way to grow

your personal

portfolio since

the stock market.

Part2/3

Know yourproducts.

Crowd financing 101

Explaining how crowd financingreally works, with the help ofsome of our friends.

Let’s think of crowd

financing in this context;

where the farmer represents

an innovative business

owner you might want to

invest in. The cow is his

company and the milk, his

product (and in certain cases,

intellectual property.)

Explaining what crowd financing products really are, using the farmer, his cow and a little bit of milk.

Know your crowdfinancing options

The business owner will

apportion a percentage of his

monthly revenue to fulfil the

contract, and will always

guarantee the principal sum

of your investment.

Look out for cool rewards and

snazzy throw-ins on top of

the potential upside of

sharing in your invested

business’ revenue stream up

to a defined multiple of your

initial investment sum.

In a Revenue Share

investment on Fundnel, the

duration of contract is fixed

by the business owner

(i.e. number of months)

RevenueShareYou invest some money to help a farmer buy a cow. A few months later, he returns your original investment, plus a little bit of milk as thanks. If he did well during those months, he’ll even share some of the profits from the sale of his milk with you.

1

You give the farmer some money to buy over a number of his cows, and you enjoy some of the profits from the eventual sale of the milk.(…or cows …or both).

Equity investments have

incredible potential upside,

whilst also being more risky.

For example, would you have

been open to bankrolling Jack

when he was still living with

his Ma?

In equity investing, it’s especially

important to invest only in

companies that you see yourself

holding a long-term position in,

given the likely extended duration

of the exit point of your

investment.

An equity investment in a business is a lot like buying shares of a company on the stock market.

Equity

2

Bonds

3

You give the farmer a loan to buy more cows after which he’ll pay you back in full, with interest.

Bond investments on Fundnel

go further than being a mere

‘loan’ to business owners; they

typically scale up operations

and reach, and give businesses

a real chance of going large,

literally.

The Bond investment

opportunities we feature are

usually shorter in tenor, to help

you recover your investment

more quickly than conventional

off-the-shelf products available

in public markets.

Here are some examples of

events that could trigger an

Equity conversion on your

Convertible Bond investment:

The company is going to list on

the public market (IPO)

The company grows large

enough to raise a subsequent

round of equity financing.

ConvertibleBonds

Much like the Bond product, with the additional chance of owning a couple of the cows if an extraordinary event occurs!

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Part3/3

Crowd financing 101

What you really need to know

3 thingsto remember

Start with ‘why’1.

You’ve made it this far into our document; now ask yourself ‘why’.

Your passion and beliefs are what drives your investment decisions at the end of the day, whetherit’s a vicarious understanding of that local juice store’s business mantra, or a belief that Star Wars-themed drones will become a reality in the next 12 months. We always encourage you to figure out what makes you tick before you click.

Do your homework2.

So you’d like to back a cool new business. But have you done your due diligence?

What’s the potential for this business to go really large? When will you be able to monetise your investment? What are some of the risk factors that might affect your investment’s security? And how long before you realise real gains on your investment?

These are all hard questions that businesses expect to answer; all you have to do is ask.

Investments hold risk, and whilst we give you the best treasure maps, you’re the captain of your own ship. Don’t think twice, think thrice, and make investments only on terms acceptable to yourself. It’s worth remembering that investing is just as thrilling as a day at the races, and you need to bet on the jockey as well as the horse.

#fundwisely3.

Rather than hide little disclaimers in pages you don’t visit, we’re saying this upfront:

Questions?Answers?

We’re manning this email address and facebook page all day. Reach out to us anytime! (Even if you just fancy saying hi to us and the crew)

enquiry@fundnel.com facebook.com/fundnel